Wine Industry Report

“Europe was born out of the spirit of wine,” said Rudolf Trossen, a wine-grower, taking part in a public hearing on a sustainable European wine sector last week. He was among the industry representatives debating the Commission’s plans to reform EU support for wine producers. Almost all participants agreed that reform was necessary, but they protested against Commission plans to reduce production by grubbing up vineyards.

Wine consumption in the EU is falling, imports are increasing rising, and exports are growing only slowly. Large scale overproduction is being supported by taxpayers, who pay for distillation of excess wine into alcohol. The participants at the hearing organised by the Agriculture Committee all agreed on the basic symptoms that have led the Commission to review the Common Market Organisation for Wine (CMO). But the Commission’s proposed cures were harshly criticised by representatives of wine-growing regions and wine-making industries.

Grubbing-up plans rub MEPs the wrong way

The most contested issue was the Commission’s proposal for a fund to compensate farmers who cease cultivation altogether and grub up their vineyards. Lars Hoelgaard, a Deputy Director General at the European Commission, argued that the fund simply offered the choice to vintners to leave the market before a major liberalisation took place. MEPs and industry representatives disagreed.

Ilda Figueiredo (GUE/NGL, PT) said that grubbing-up was equivalent to “destroying a cultural heritage.” Rudolf Nickening, from the Deutscher Weinbauverband (Germany) said that a European “market-balance is impossible to find, because the outside pressures from imports would upset it anyway.” Patrick Agrain, representing VINIFLHOR (France), said “such a de-capitalisation, without increasing competitivity, would simply result in ceding our place in the market to our competitors.” João Vieira, from the Confederação Nacional da Agricultura (Portugal) called the Commission proposal “a threat to the European wine industry.”

New markets, new marketing

“Our problem is not that we are producing too much, but that we are selling too little,” said Mr Agrain. The solutions he proposed to right this imbalance were to find new markets and expand existing ones. “The main factor of our difficulties is the import/export balance,” said Mr Agrain. “We need to find new markets” in other parts of the world, said María del Pilar Ayuso González (EPP-ED, ES). The way to do this was to improve marketing efforts, and MEPs and representatives from the sector suggested that the bulk of Commission funds be put to this use, rather than for grubbing-up. “Marketing is our big problem, especially compared to New World imports,” said Mercedes Gómez Rodrìguez, Regional Minister for Agriculture in Castilla-La Mancha, Spain.

Winemaking process and labelling

A lively debate also took place about the Commission’s proposal to allow wine-making practices such as the addition of wood-chips or water to community wines. These are currently banned in the EU, but are accepted practices abroad, including by the International Organisation of Vine and Wine. Mr Hoelgaard asked Members to “stop criticising American wines for being successful. The consumers are buying them, and it is they who decide.” But Astrid Lulling (EPP-ED, LU) said “the hatchet of additives had been buried during the 1999 discussions of the CMO in wine, and it should not be dug up again.” José Ramón Fernàndez Barrero, Secretary General of CEEV (Comité européen des Entreprises Vin) said the key to resolving the issue was to have precise wording on wine labels, “explaining the exact characteristics of the product.” Then consumers could choose what products they were willing to purchase.

“How do you create one CMO in wine for all the various regions of Europe?” asked Katerina Batzeli (PES, EL), the rapporteur for the own-initiative report on the Commission’s plans, summing up the difficulty of the reform process. Her report should be put to the vote in the agriculture committee on 23 October, with a plenary vote scheduled for 14 November. The Commission’s formal legislative proposal is expected before the end of the year.

The Finnish Minister for Agriculture and Fisheries, Mr. Juha Korkeaoja spoke to the Committee….